A Tata Group-led consortium is likely to rejig its investment in GMR Airports Ltd, after GMR decided to dilute its stake in its airport arm by 49% in order to meet the regulatory requirement of 10% shareholding cap for Tata Group in Delhi International Airport Ltd (DIAL), said two people with direct knowledge of the matter, requesting anonymity.
“While the Tata Group has limited ability to increase its stake, its partners, especially GIC of Singapore are likely to increase their stake in GMR Airports," said the first person.
GMR Airports owns operates Delhi International Airport. It also runs the Hyderabad International Airport.
The investment proposal for Tata Groups Inevstment in GMR Airports has already run into controversy with several local airlines highlighting potential conflict of interest, as the Tata Group holds stakes in two airlines—Vistara and AirAsia India.
The case is likely to be a benchmark as the civil aviation ministry is in the midst of privatizing several airports. The Tata Group, as well as other airline promoters, are expected to bid for airports.
A spokesperson of Tata Sons did not respond to queries. A spokesperson for GIC Pte Ltd, Singapore’s sovereign wealth fund, was not immediately available for comments.
The Economic Times reported last week that GMR Infrastructure Ltd has raised ₹2,000 crore debt through non-convertible debentures from Tata Sons and GIC to retire earlier loans.
In a filing to the BSE, the GMR Group on Thursday said it has decided to divest 49% in GMR Airports (GAL) against a previously agreed 44.44% stake, to TRIL Urban Transport Pvt. Ltd, which is part of the Tata Group, and two of its overseas partners.
“This is another step in our endeavour to deleverage and demonstrate our commitment towards the same," the company said, adding that the transaction is expected to be completed in one or more tranches, and its closure is subject to regulatory approvals.
A GMR Infra spokesperson declined to comment. However, a company official said, requesting anonymity, that the details of the transaction are being worked out. “This is a provisional increment. We will have to see what the Tata Group’s final stake in DIAL, which operates the Delhi airport, will be," he added.
In March 2019, GMR had announced that the Tata Group, GIC and Hong Kong-based SSG Capital Management will co-invest in its airports business in a ratio of 44:33:22. Out of the total investment, ₹1,000 crore will come as equity infusion into GAL, which will be used to retire its debt.
Last October, the Competition Commission of India (CCI) had cleared the deal. However, the Airports Authority of India (AAI) sought the opinion of the Solicitor General of India on the legality of Tatas plan to take a majority stake in GMR Airports.
“If AAI is taking time with it, there’s a reason for it. The agency has to ensure that everything about the deal abides by regulations," said a senior AAI official, who requested anonymity.